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Inside Washington (04/10/2012)

WASHINGTON (4/11/12)--Two years after the federal government eliminated its Federal Family Education Loan Program in 2010--ending subsidies for student loans originated by private lenders--the student lending market faces more changes. Starting on July 21, lenders must report their practices, including the underwriting standards they use and the pricing and terms of their loans, to the Consumer Finance Protection Bureau (American Banker April 10). Sen. Richard Durbin (D-Ill.) is pushing a measure that would allow private student loans to be discharged in bankruptcy. President Barack Obama in January announced a plan to expand the Federal Perkins Loans Program to $8 billion from $1 billion, which could cut the market share of financial institutions by expanding the availability of lower-cost federal loans to students. Concerns have surfaced about rising default rates on student loans. Americans now owe more than $1 trillion in student debt …

WASHINGTON (4/11/12)--In the aftermath of the financial crisis, financial stability policy is considered to stand on equal footing with monetary policy as critical responsibilities of the central bank, Federal Reserve Board Chairman Ben Bernanke said Monday. But predicting the next crisis remains a greater challenge when compared with the Fed's ability to impact economic policy, Bernanke said at the 2012 Federal Reserve Bank of Atlanta Financial Markets Conference in Stone Mountain, Ga. "We have spent decades building and refining the infrastructure for conducting monetary policy," Bernanke said. "And although we have done much in a short time to improve our understanding of systemic risk and to incorporate a macroprudential perspective into supervision, our framework for conducting financial stability policy is not yet at the same level." Since the crisis, the Fed has instituted reforms related to securitizations and structured finance vehicles, money market funds and repurchase agreements to minimize market vulnerabilities, Bernanke said …

WASHINGTON (4/11/12)--Financial institutions will be dramatically affected by any reforms to the U.S. Postal Service, which has endured a sharp drop in revenue as a result of the recession and rapid technological change, said the American Bankers Association. More than half of all statements and bills sent through the mail come from financial institutions, including credit unions, according to the U.S. Postal Service (American Banker April 10). Three bills related to U.S. Postal reform are making their way through Congress. One bill would make it easier to raise postage rates above the rate of inflation. Another measure calls for a five-day delivery schedule and closures of postal facilities. Also on the table is a bill that would allow the U.S. Postal Service to provide non-postal services such as check cashing …